Property funds stop transfers

by Martin Vaughan on 12 May 2008

This from Money Marketing:

Advisers are outraged by the news that Scottish Widows and Axa do not allow the partial transfer or surrender of pensions if a client has any money invested in restricted commercial property funds.  Earlier this year, providers including Axa and Scottish Widows, imposed withdrawal restrictions on their commercial property funds and these are still in place.

Most pension providers allow the transfer of the part of the pension portfolio which is not invested in these property funds to another life office, but Scottish Widows will not allow it on any contract while Axa will only allow it on certain contracts.

Hargreaves Lansdown head of pensions research Tom McPhail says: “This is so typical of life offices. I do not recall ever seeing this kind of warning on pension arrangements which is why I am so shocked by the whole thing.”

CBK principal Peter Chadborn says he would be put off from recommending both providers to pension clients in the future and says this is not treating customers fairly.

Scottish Widows says it does not have the facility to allow partial transfers while Axa says that different contracts have differing terms and conditions and therefore will not always allow partial transfers.

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